Ditch mediocrity and transform supply chains in 2017

By | Business Complexity, Culture, Leadership, Lean Manufacturing, Lean Thinking, Marketing Procurement, Point of Purchase, Productivity, Retail Fixtures, Shopper Marketing, Supply Chain | No Comments

next-big-thing

It is that time of year where a significant number of articles are written about the key trends that will be happening in the year ahead. I don’t know about you but I find that businesses don’t really pay any attention to these types of predictions and it takes forever for companies to adapt to market changes. There are only ever a few individuals who are willing to take a risk and actually set out to make a real difference to their business by implementing real change.

So this is for you, the mavericks, the pioneers and the risk-takers who won’t accept the status quo and where the word “mediocre” is consigned to the dustbin.

I am specifically going to focus on non-core supply chains. So here is my list of predictions for 2017. To be honest, it is more a wish list than a set of trends, but in my mind the individuals and teams who follow these principles will add significant value to their companies and transform how supply chains are managed.

1.SaaS (Software As A Service) will become Software And Services

Many people see software as a means to fix broken processes in companies but this is just not the case. Software is an enabler. It provides organisations with the opportunity to be more efficient about how they manage part of their business BUT it cannot fix underlying problems where processes are broken or skills are deficient. The challenge with supply chains is that they are complex, multi-disciplinary and require every element to function efficiently. If they don’t and one element is broken then the supply chain falls over. This is why TCO (Total Cost of Ownerhip) was introduced to ensure that there is responsibility defined for the entirety of the process.

In many cases, organisations don’t have the depth of experience and skills to ensure that a supply chain operates in the way it should and so they rely on suppliers to fill in the gaps. The end result is that these suppliers act in their own best interests rather than putting the customer first. This has created an opportunity for a new type of software company that not only provides software but wraps services around it in a highly transparent way that addresses these market shortfalls. Supply chain leaders need to embrace these new types of organisation and transform their supply chains.

2.Networkers will become the leaders

I have to say my biggest bugbear is when individuals within large organisations create barriers to information flow. They never respond to a communication, their phones are automatically directed to voicemail and worst of all they say they’ve passed on your details to colleagues who will get back to you if they need to. So how likely is it that these people have conveyed the opportunity successfully? I doubt if they even understand what the opportunity is.

The individuals who will prosper in this new networked economy will be those people that “Pay it Forward” and seek to help people both internally and externally connect. Too many people believe that an organisation comprises employees only. This is just not the case. The success of any organisation depends on all stakeholders; employees, partners, suppliers and most of all customers. Everyone has a contribution to make to the success of the company and their voices must be heard. So, if someone calls, set aside 5 minutes and take the call. You will never know what you can learn and what opportunities might await.

3.Transparency will be the No1 priority

There is a lot of focus on analysing data but the question I always ask is do you have the data you need? In so many supply chains there is little to no real transparency. You may have prices but you don’t know what the true costs are from your suppliers. It is like the iceberg, you only see a small part of the puzzle. It is imperative that supply chains are opened up and every element and every cost is transparent, so a real understanding develops of what all the cost drivers are from start to finish.

Strive for transparency but do this with the principle that transparency will help create additional value that can be shared. If you see transparency just as a means of reducing margins, with no other end result, you will promote and encourage the lack of information sharing that you face today.

4.Real-time updates will take precedence over historical reporting

The vast majority of company reporting has been focused on historical reporting. The problem for procurement and for supply chains is that this information comes too late to address any issues that have arisen or to create additional value. The problem with complex supply chains is that if an issue is not addressed immediately then the problem only gets worse. How often have you received that call from the supplier that your shipment will be three weeks late? Clearly a problem like that did not happen overnight.

It is imperative that real-time data becomes a priority. This should take precedence over any other form of reporting. Remember if you can’t influence the outcome then the data and subsequent analysis has limited merit.

5.Procurement will switch from margin reduction focus to removal of waste

Lean manufacturing principles have transformed a number of industries and functions, but procurement have been slow on the uptake to adopt these principles. Procurement’s main focus has to be to obtain the best possible price and this in general has always been focused on reducing the margin taken by the supplier e.g. negotiating the final delivered price. This needs to change. Procurement need to take ownership of the process and to switch their focus to finding ways to remove waste, where resources (people, time and money) do not contribute to the final outcome. This requires leaders to look internally as well as externally.

Consider this: A one hour meeting attended by seven people is the equivalent of one Full Time Employee. Also consider how long it takes to get anything done. Perhaps your diary is so booked that you are not able to see a supplier for 6 weeks. Well that is 6 weeks of potential opportunity to add value back to the business that has been lost. It doesn’t take long to identify significant opportunities to dramatically reduce waste in this way and to add real value back to the business.

How many of these principles will you be supporting next year?

If you would like more information on how LeanPie can transform your retail fixture and permanent POP supply chain, please feel free to contact David at david@leanpie.com

Undervalue decision-making at your peril

By | Business Complexity, Culture, Distributed Teams, Leadership, Marketing Procurement, Productivity, Shopper Marketing, Supply Chain | One Comment

decision-making

When the topic of decision-making comes up, it is often a debate on how does one make the right decisions, rather than the wrong ones. However, this focus completely undermines the fact that for a decision to be of any value it has to be implemented successfully.

Decision-making in corporations is complex and fundamentally if the process is not conducted in the right way there can be severe repercussions for the potential value that is created. The most obvious issues include:

  • Lack of participation leading to substantial delays in reaching a decision
  • Lack of ownership in the decision leading to a lack of team engagement and productivity
  • Lack of commitment in implementing a decision leading to fragmentation, misalignment and poorer outcomes

So how does one go about establishing the right conditions for team decision-making to be optimal? I believe consideration should be focused on the following areas:

  1. Establish team working
  2. Understand the objective
  3. Identify the challenges
  4. Build insights
  5. Consider all options
  6. Ensure alignment on identified solution
  7. Test and validate to build confidence and commitment
  8. Focus and implement

ESTABLISH TEAM WORKING

Leading a team requires key leadership skills and it is very important to establish clarity on how the decision-making process will be conducted. Different nationalities have different ways of reaching decisions and this can be quite alarming when it is not familiar. It is also essential that the approach to decision-making is highly democratic in respect that everyone has a voice, every voice is equal and every voice is listened to. Here is a link to another blog titled “Procurement and the challenge of distributed teams” that provides some considerations for creating a high performance team.

“Talent wins games, but teamwork and intelligence wins championships.” Michael Jordan, Retired American Professional Basketball Player

UNDERSTAND THE OBJECTIVE

The most usual case is that members of the team may have different objectives or different perspectives on the same objectives, so you need to start with a clear Core Purpose. Once the end goal (destination) is set it becomes easier to develop and agree on a strategy to get there. It is the outcome that is important, rather than the process by which that outcome is reached.

IDENTIFY THE CHALLENGES

Define the problems, challenges and barriers to success. Be honest. Once you have identified these, you will be able to ignore distractions and focus on working to resolve and overcome the identified impediments. Identifying and addressing primary constraints are the single biggest reason why change does not happen and why team initiatives do not succeed.

“A problem well-defined is a problem half solved.” John Dewey

BUILD INSIGHTS

The better informed the team, the easier it will be to remove subjectivity and to make insightful decisions. There are generally three rules in business when it comes to decision-making, in an environment when goals are not clear and information is scant at best:

  1. Everyone has an opinion
  2. Every opinion if different
  3. Every opinion is right

Very simply the more insightful the debate, the easier it is to reach agreement.

“Collective Wisdom outshines individual judgment.” Vineet Nayar, Author Employees First, Customers Second

CONSIDER ALL OPTIONS

Consider all points of view and recommendations. The approach needs to be inclusive to promote and encourage all team members to fully participate. The best way forward often comes from the most unexpected source. Each recommendation should be treated equally and with respect.

ENSURE ALIGNMENT

It is crucial that each individual team member is engaged and that their agreement is provided. I have been in corporations where I attended a presentation and as I did not question the position, my silence was taken as tacit agreement. This is not acceptable. Everyone needs to voice their full agreement in an open and collaborative way.

“My opinion, my conviction, gains immensely in strength and sureness the minute a second mind has adopted it.” Novalis (1772 – 1801), German Author and Philosopher

TEST AND VALIDATE

Risk and the fear of failure can motivate some team members to withdraw their full agreement. This needs to be addressed and the best way to do this is to test the agreed hypothesis and to work through this to create validated learnings. This not only ensures you have found the best solution but it further motivates commitment, builds confidence and ensures the entire team’s full focus and support is provided.

FOCUS AND IMPLEMENT

When a team is participating in a single programme, it is likely that all team members will have differing priorities and tasks so it is important that roles and responsibilities are well-defined. In addition, having made a decision, there is no value in questioning the decision. The best possible decision has been made and the team should focus on implementing it to the best of their ability. It may turn out that a better decision could have been made, but you will never know until you act.

“When a team outgrows individual performance and learns team confidence, excellency becomes a reality.”  Joe Paterno (1926 – ), American College Football Coach

Decision-making is often an integral part of a change management programme and therefore another useful guide for this is Growth River’s Seven Principles for Team Effectiveness:

  1. Inspired by purpose (well-defined clear goal or desired outcome)
  2. Focused on a shared journey (detailed process for achievement)
  3. Accountable and collaborative mindset
  4. Right skills in the right roles
  5. Strong and clear interdependencies, reinforcing team agreements
  6. Advocating strategies from a customer value perspective
  7. Laser focused on implementation that resolves primary constraints for the highest impact and return on investment (ROI)

The process of effective decision-making lies at the heart of why many companies find it challenging to run successful pan-regional programmes. This is especially true in complex areas like shopper marketing where very different retail landscapes are coupled with consumers with different needs, expectations, languages and cultures. In these cases, it is imperative that a clear and intentional process is created that will guide decision-making for all stakeholders in a fair, equitable and clear way.

Procurement and the challenge of distributed teams

By | Business Complexity, Culture, Distributed Teams, Leadership, Marketing Procurement | No Comments

workplace 1200

Procurement has to work in a complex, matrix environment. In many cases they will need to engage with colleagues in different functions, different offices, different countries and often different time zones. This distributed structure brings significant challenges. There is not only distance created by physical location but there is also distance in levels of alignment, engagement and degree of cooperation.

For a procurement leader to be successful they have to develop people skills that enable them to lessen the impact of distance and to be able to create highly collaborative team working.

The following provides some insights and recommendations as to how a team leader can overcome the lack of co-location in order to build a highly productive team.

Align to the core purpose

  • Convey, share and build understanding for the company’s core purpose
  • Direct team energy towards business unit and corporate goals
  • Demonstrate how the team’s work supports the overall company strategy
  • Share executive dashboards
  • Regularly review company performance and key priorities

Ensure team balance

  • Create a culture based on a “team of one”
  • Leader to show support for all teams equally, irrespective of role, location or other factors
  • Mitigate any power bias by ensuring that all parties are able and willing to contribute fully, irrespective of other factors
  • Identify and share the key behaviors that you would like everyone to adopt

Get to know everyone

  • Understand cultural and ethical differences of all team members by talking openly about their individual beliefs
  • Be culturally sensitive
  • Encourage informal interactions between colleagues and discussions on non-work related matters so people can get to know each other

Build personal relationships

  • Build personal relationships (not just work relationships) with colleagues
  • Meet informally and spontaneously to foster friendship
  • Celebrate birthdays etc.

Engage frequently

  • Ensure frequent engagement but avoid being disruptive
  • Set aside a core hour per day, where there are no formal meetings, to encourage spontaneous interactions
  • Convey how individual and team contributions matter
  • Involve team in important strategic decisions

Find unstructured moments

  • Encourage people to have unstructured moments where they can talk about things away from work
  • Build in these moments to formal meetings
  • Encourage people to share constraints and to ask questions on items that are not directly related to the meeting

Encourage feedback

  • Encourage feedback, especially in regard to routine communications and interactions to make sure current approach works for everyone
  • Use videoconferencing to help promote more transparency and openness
  • Help build awareness on how the team works and how the various parties are seen by each other

Promote diversity of views

  • Encourage different viewpoints about the team’s tasks and also about the process by which the tasks get done
  • Frame these meetings as brainstorming meetings so people are happier to contribute diverse ideas
  • Use the 5 Why’s questioning to get to the heart of the matter
  • Solicit each team member’s views on each topic often starting with those who have the least status or experience

Use language wisely

  • When speaking, acknowledge and respect the language fluency of others
  • Seek confirmation that you have been understood
  • Summarize by rephrasing others’ statements for further clarification or emphasis
  • Monitor the frequency of less fluent speakers to ensure that they are contributing
  • Ensure less fluent speakers ask for confirmation on what they have conveyed and to also notify the speaker when they have not understood something

Support inclusion and diversity

  • Keep track of who isn’t and who is contributing
  • Actively encourage the dominant team members to engage the others for their input

Continuously learn

  • Ask a lot of questions before drawing conclusions
  • Probe to ascertain any potential challenges or needs for additional resources
  • Use questions and answers as a means of building strong two-way engagements between team members
  • By positioning yourself as someone who seek to learn, you will empower and motivate other team members to contribute more
  • When everyone is a teacher and a learner, team members will take on more responsibility for the development of the team as a whole
  • Leaders need to focus on facilitation rather than instruction

Focus on team outcomes

  • Build a culture that is committed to reaching a group consensus
  • No one way is right, allow the team to find its own way

Share information and reinforce messages

  • Follow-up meetings with a summary of agreed actions
  • Meeting summary helps reinforce acceptance of ideas and can be used for gaining written endorsement when required
  • Meeting organizers should communicate through multiple platforms to ensure that meeting outcomes are understood and acted upon

Lead by example

  • Team members will follow the leader’s example in using communication technology
  • Team leaders should adopt a flexible approach that has a strong appreciation for diversity of ideas

Consider type of engagement

  • Use teleconferencing and videoconferencing to enable real-time (instant) conversations
  • Videoconferencing enables rich communication in which both context and emotion can be perceived
  • Consider time zones when considering how to engage, so there is limited disruption to team members personal lives
  • Only use delayed communication like E‑mail when other members are unavailable. In general, evidence suggests that most companies over rely on delayed communication. A recent Forrester survey of nearly 10,000 information workers in 17 countries showed that 94% of employees report using e‑mail, but only 33% ever participate in desktop videoconferencing with a mere 25% use room-based videoconferencing

Leaders that understand and can overcome the impact that a distributed structure has on team working will dramatically increase the contribution that they can make to the business. This is even more significant for Procurement Leaders where the level of spend under control has a direct correlation with the ability to create value.

MARKETING PROCUREMENT; How to master complexity without getting complicated 

By | Business Complexity, Culture, Leadership, Lean Thinking, Marketing Procurement, Productivity, Supply Chain | 7 Comments

time-watch-theme-machines-gears

Complexity is all around us. We not only see this in our personal lives but we feel it even more in our business lives, especially if you work in marketing. Marketing is a great example of how the business world has changed. There are now more ways to engage with customers than ever before and this seems to change on an almost daily basis. Just in the last week, the arrival of Pokemon Go has provided another means by which brands can effectively engage and interact with customers.

The challenge with complexity is how to deal with it. Most businesses respond by either adding more structure and processes or they try and force people to work in a certain way through off-sites and team events. The reality is that both approaches try and force a way of working on the individual that usually restricts their ability to operate in an optimal way. The individual ends up spending more time managing the complexity and their workload rather than actually doing the work and delivering value.

The Boston Consulting Group have created a great guide to helps teams overcome the complexity challenge. They call this “Smart Simplicity” and they have published a book called Six Simple Rules on this very subject. In addition, they have distilled the highlights into an eBook which you can access here.

The six rules are highlighted here:

  1. Understand what your people do 
  2. Reinforce integrators 
  3. Increase the total quantity of power 
  4. Make cooperation happen 
  5. Extend the shadow of the future 
  6. Reward those that cooperate 

I would like to take this opportunity to apply these to a marketing procurement team. In this way, I would like to provide some recommendations on how one might be able to overcome complexity, and the resulting resistance that ensues, to deliver sustainable value.

1.Understand what your people do

First of all, know what outcome marketing are trying to achieve. Then find out what is happening in the process to achieve this. Investigate the supply chain end-to-end and identify what resources are at work and where there are constraints or issues. Map this out and look at ways to remove waste and increase the flow from one stage of the supply chain to another. In this way outcomes will naturally be improved as the supply chain is more optimal and everyone benefits from the additional value created.

2.Reinforce integrators

This is about achieving cooperation. Cooperation is different from collaboration. Cooperation is helping others achieve their goals whereas collaboration is where a groups of individuals work together to achieve a collective team goal. This is all about finding a common area of value and aligning everyone to achieving it. You need to find a way to make your goals relevant to the goals of your colleagues.

3.Increase the total quantity of power

If you wish to help increase the ability of your colleagues to create more value, then arm them with the data and insights to make better decisions. This intelligence not only comes from analytics but also from the experience of others. Help colleagues become better informed through “Network Intelligence” by giving them the information they need when they need it but by also connecting them with others who can add expert advice, perspectives and recommendations.

4.Make cooperation happen

Create an environment where marketing rely on procurement for certain tasks etc. The first task, once you have gained control over the end to end supply chain, is to ensure clear definition of roles so overlaps are removed and interdependencies are created. Then look at the decision points and agree on how these will be handled so there is collective ownership on how the entire supply chain is managed. This way everyone has skin in the game and some ownership in the final outcome, not just part of the process.

5.Extend the shadow of the future

Establish a culture of continuous learning. Make sure that performance is evaluated and that validated learnings are captured and applied to all subsequent activities. This becomes more dynamic, when everyone is invested in the outcomes, so make sure everyone is involved up to the point of final delivery. In addition, by taking this approach, when issues do arise these need to be resolved as a team. This way, everyone is exposed to and has a responsibility to resolve them.

6.Reward those that cooperate

Agreeing desired outcomes upfront is clearly paramount but it is making sure that everyone is recognised for achievement against those that really stimulates cooperation. In other words, reward and recognise marketing for making costs savings at the same time that procurement is rewarded and recognised for delivering better outcomes.

I hope this provides some food for thought. We know that business is challenging and becoming ever more complex. That is why, at LeanPie, our mantra is to strive for simplicity, without adversely impacting the value of the outcome. As Albert Einstein once said “Everything should be made as simple as possible, but not simpler.”

Please feel free to contact me directly at david.newberry@leanpie.com

Forget Big Data, give me Real-time Data now

By | Big Data, Data Analytics, Marketing Procurement, Point of Purchase, Retail Fixtures, Supply Chain | No Comments

Blog data

There continues to be significant discussion on the topic of Big Data. Big Data is the term used to describe very large data sets that need to be analysed computationally as they are simply too large to be reviewed in a manual way. By using the latest analytics software, you are able to identify and reveal patterns, trends and associations between the huge numbers of data points. This helps you better understand the relationships at play, how various parties are behaving and what interactions are taking place. This unearths new opportunities or potential challenges that were previously hidden.

So how does this relate to a Marketing Procurement function? It is likely that more data is now being captured on the goods and services that marketing are procuring. As these data sets increase in size, analytics can help uncover hidden value. However, what is more important is understanding which data points are valuable and can be acted upon. I like to refer to this as Small Data. Not all data has the same value and it is therefore imperative to identify what data is critically important and can influence commercial performance. The second step is to make sure that the quality of this data is accurate, robust and able to be analysed.

An obvious example is, how you might classify all the goods and services that marketing are buying. If there is no standard classification system in place and every party is using their own unique terms, then you would need to rely on key word analysis and this is less than optimal. The second factor is the degree or depth of classification system you use. If every display rack is just classified as “Display Rack” then counter units, floor-standing units, wall mounted units and promotional units would all end up being classed the same and any analysis would be just too high level. 

The starting point, when approaching data analysis, is to not only look at the data you have but more importantly to identify what data you NEED. Data has no value if it cannot be actioned. Identify the actionable “Small Data” that you require and then put in place structured processes that enable you to capture this. For Marketing Procurement you need to look at the various supply chains as your means to capture this data.

The other factor that is critical for Marketing Procurement is the need to gain access to the data in real-time. If you are able to capture data from the supply chain, at the start of the process and in real-time, there is a huge opportunity to influence and add value. If your only access to data is internal data (Purchase Orders) and after the event, the opportunity to add value has gone. Here is why:

  • Marketing investments are constantly changing, so having historical data for an investment that won’t happen again has limited to no value
  • If there is missing or inaccurate information, trying to obtain this after the event is very time consuming and in many cases futile as suppliers have no incentive to help
  • After the event, there ends up being a reliance on the supplier to provide the information you need, on their timeline and in their format
  • You will always be the last to arrive at the party and as such the level of influence you can bring will be dramatically reduced

So, how can Marketing Procurement use data to transform how they can add value. Here are some tips:

  1. Identify what data you need
  2. Establish the standards by which that data needs to be provided
  3. Identify the supply chains where that data will originate
  4. Ensure you identify the front-end of the supply chain and always include that is your approach
  5. Introduce new processes, procedures and systems to those supply chains to make sure they are fully transparent and can provide you the data you need, when you need it

The reality is that if you are involved from the beginning and you are able to obtain the data you need in real-time, your ability to influence will increase exponentially. End-to-end supply chain management with a strong data – insights driven strategy will unlock significant value.

This is the approach that sits at the very heart of why LeanPie was founded. If you are looking to transform how you design and procure retail fixtures and Point of Purchase materials, you should look no further. We commit to “Clarity and Control through Precision” based on:

  • Clarity – transparency – cloud technology (transparent data)
  • Control – governance – lean processes (real-time data)
  • Precision – engineering skill – talented experts (structured data)

There is no downside to talking to us and you might unlock some data that you didn’t know before. We look forward to hearing from you at david.newberry@leanpie.com